Most Amazon sellers never turn on the sponsored ads campaign (PPC campaigns) the reason? They think there is too much competition and that they will burn through a lot of money. Which is of course a fair hesitation. The issue is that Amazon’s campaigns are designed to reward you. They are the easiest PPC campaigns I’ve personally ever worked with and if you have 20 good reviews already in place and your copy on the listing page itself is well written then you will have a good ROI on these campaigns.

The ROI for the sponsored products campaigns is measured in ACOS. This stands for Amazon cost of sales. All this means is how much it has taken (in a percentage term) for you to generate X amount of sales. For example if we spent $10 to generate $100 in sales that would be a 10% ACOS. $20 would be 20% and so on. Remember this can go above as well, so if you spend $200 to generate only $100 in sales that would be a 200% ACOS. This would be pretty difficult to do though, and if this did happen, the issue probably isn’t your ppc campaign it’s actually your product or the product listing itself.

Turning these campaigns on is essential for a number of reasons. First up, you can test which one of your keywords is converting the highest. This is great data to have from a general business point of view. If you ever go on to Adwords or any other paid advertising you have this data already. Secondly you will likely generate a profit from this advertising medium anyway. For example if you sell a product for $100 and you have a 40% profit margin all in, then any acos under 40% will actually generate you a profit for each and every sale. Something that is not only possible but quite probable. Below are a couple of screenshots from our campaigns for myself personally and a couple of clients.

As you can see the 2 campaigns above have been very profitable for us over the past 3 months. We have an Acos of 13% and 24% and you can see the sales figures as well. But it wasn’t always this good. Both campaigns started over 50% Acos (profit margins of products are about 40%) meaning we were making a loss on each sale. The reason why we let these run is because we knew they would improve due to improved listings. For example if you have a listing that only has 5 reviews when you turn on the PPC campaign, it is likely to convert worse than a listing that has 50 reviews. So as you gradually increase the number of positive reviews on the listing, the conversion rate will also increase. If your ACOS is above 100% for longer than a couple of weeks then you need to re-evaulate your situation. But remember if you have a superior product then taking a loss to get your brand in front of more customers might not be a bad idea.

The second screenshot is from a campaign that went pretty much as well as you can imagine. The niche was clean, we optimised the product listings for both individuals and Amazon’s search engine and generated the reviews to help conversions. This led to a ridiculous conversion rate and a 6.00% ACOS. 6% Acos’s generally only happen when there is a very low amount of clicks, but as you can see we had spent $200 to generate $3,000!

Not all campaigns work this well, but if you have a high number of positive reviews and a good product there is no reason why Acos should be over 20%. If you have any questions or would like some advice with PPC feel free to get in touch.

Last week I did a webinar with Veeqo (cool company btw) about some of the more advanced tips to improving rankings and generating more sales through Amazon. They had about 300 sign ups with about 80 attentees for the webinar so this was a relatively large audience, all of whom make over $1,000,000 a year in revenue through Amazon. As a result outlining the basics of Amazon marketing wasn’t really going to be relevant so instead I created a presentation that went pretty in depth into how to scale your business. I could write exactly what was talked about in the presentation but instead I wanted to just embed the webinar itself. If you have an Ecommerce business with more than 1 sales and marketing channel (Ecom store, local store, Shopify, Amazon, Ebay etc) then I would recommend checking out the Veeqo software!

Hey, so last month we looked at episode 1 and the current position of the business. Honestly there was not much going on in April, we hit about £2,400 in sales which is slightly lower than we would have liked but we didn’t invest any capital into the business so took home about £800 ready for the next launch. In episode 2 we are going to look at April’s results, again this was just a consolidation month and one where we are researching a lot of products. 2 have now almost sold out but have been purchased and are on-route to their respective Amazon fulfilment centres.

Results for April

April was a pretty quiet month as previously mentioned. Nothing much going on but still some nice sales. Remember this is a passive business, we spend less than 4-5 hours a week on this business. The majority of the time input comes from product research and launching a new product when they arrive, which is hopefully during the end of May. This is where a high amount of capital goes too.

Instead of the broad product data I thought it would be a good idea to break everything down per product. This is for my own personal tracking reasons too. So currently we have 3 products, all stats are below:

Product: STA:

1. Revenue: £740
2. PPC spend: £23
3. Profit: £345.

Product: WRA:

1. Revenue: £35
2. PPC spend: £5
3. Profit: £15

Product: LEG:

1. Revenue: £1,475
2. PPC spend: £28
3. Refunds: £175
4. Profit: £445.

Goals for next/This month (May):

1. Re-launch product WRA. Increase sales velocity + Test a launch service.
2. LTD company confirmation with Amazon (This is ongoing).
3. Launch product 4 BEL (This includes product purchase, production and shipping)

The main aspect slowing the business is capital, and the second product. Our launch strategy is better for each product and once we have 5-7 products fully launched with our new strategy we should hit that £10k revenue mark…. Then we have to register for VAT and lose all our profits…..

Hi everyone,

I thought it would be interesting to run a case study talking about how to launch a successful Amazon business. Although I do a lot of marketing for Amazon SEO clients, I also own and operate my own Amazon businesses. These are very young and the one we will be tracking over the coming months is just over a year old. Making its first sale in January 2016. Although it is a year old it only has 3 products live. This is obviously not many for an Amz business and the main reason is down to time spent developing new products. Obviously we only want the top quality products for our seller account and hence growth has been slow.

Over the next months & years I want to run a case study on this business, talking about how we are going to take it from it’s current position to over £10,000 per month in sales. This is only revenue remember and not profit, but I think this is a figure most people can relate to and hence is one we will use currently.

I don’t want to reveal the business itself and the products we sell for threat of competition but I will talk about specific figures, number of products, marketing techniques, financials, Amazon PPC and how I generate reviews, sales and everything that goes into this type of business. So to start you need to get an idea of where this business is at.

Current Situation

This business is in an industry that improves in sales from November-February (as most Amazon businesses do) so as a result the March month sales are slightly down from Xmas & Jan time but this is just to get an idea. So let’s get started. Below is a screenshot of the March sales. Although we have 3 products they are all in the same category.

You can also see the “same date range one year ago” but ignore that data for now. There are a couple of other metrics we want to track. Most importantly is going to be refunds, units returned & refund rate. So we have 1 product that gets a high-ish refund rate. But for the purpose of this case study we will track everything together.

1. March sales: £2,932.73
2. Refund rate: 9.36%
3. Refund No of Units: 16.00
4. Refund £ Amount: £364.
5. Gross: £2,565.

This is going to be the basic data that we will be looking to increase/reduce over the coming months. Obviously we will be looking to increase our sales as much as possible, whilst at the same time launching new products and looking to reduce the refund rate of that product.

Goals for next month:

Our goals for April are simple, we want to re-stock a product (STA), Improve conversions of product 2 (WRA) and begin progress of launching a new product (BEL). Obviously this is going to take time and I do not see much difference occuring in the weeks between this and April’s report as there is another goal that needs sorting that I’ve heard is very painful to set-up and this is changing from an individual sole trader seller on Amazon to a Ltd company. Here in the UK you are either a sole trader or a Ltd company, there are a lot more legal requirements when you are a Ltd company but there are also a few additional benefits, such as being separated from your business (legally) and also only paying 20% tax on profits, which when you earn over about £45,000 per year in the UK is very important as otherwise you pay a higher rate of 45% on everything above that!

So the goals for the next month: 

1. Sort Ltd company information out with Amazon.
2. Complete samples of new product + Small 20 unit launch order + begin launch.
3. Complete samples of product 3 (LEG) + Calculate costs for order.
4. Begin shipping of 1000 unit order (STA)
5. £3,000 in sales.

I hope you enjoyed the first post, ideally I’ll also start making videos to go along with this post but as I want to keep the identity of the company in question private this might be an issue. But I will be posting new updates on the 8/9th of each month and I hope you come along with me on my journey to £10,000 in sales.